Public sector reform: lessons from classical liberalism

Eight years after the publication of The Orange Book: reclaiming liberalism, it is still seen as a radical and controversial publication. Within the British Liberal Democrats and beyond it has a perhaps exaggerated significance, and is seen as representing a fault-line within the party.

This is surprising, as its central message, described by one of its editors Paul Marshall as "the importance of using economically liberal means to deliver socially liberal ends" might seem to be entirely in keeping with the liberal traditions of the Lib Dems. One of the key themes of this latest edition of the Economic Affairs journal[2], which focuses on the legacy of the Orange Book eight years on, is that the controversy speaks volumes about the extent to which significant parts of the Liberal Democrat party have lost faith in – and perhaps even a knowledge of – classical liberalism and the solutions that it offers to today's challenges.

The Orange Book applied classical liberal thinking to public sector reform, with the authors setting out policy frameworks that were – more or less – couched in explicitly liberal terms. To an outsider, this might seem unremarkable, but for some considerable time Liberal Democrat policy had been shaped more by social democratic ways of thinking, including a belief in the efficacy, efficiency and morality of nationalised monopolies.